The Problem With Mainstream Adoption

There have been some people discussing the reasons we should all be a little cautious about the sudden surge of interest in cryptocurrencies from central banks and governmental agencies. While it's great to see governance issues solved through the application of blockchain and cryptocurrencies, it's not a good thing to see these technologies pulled into the regulatory schemes of the twentieth century (or older) that govern much of the world's financial institutions. I just read this article at Coindesk about Russia's potential plans to regulate cryptocurrencies like financial instruments. Here's my rant:

A horseless carriage

Taking a broad view of this situation, subjecting cryptocurrency to existing financial regulations is like regulating cars as if they were just a fancy horse. Though cars did manage to replace the horse as a means of transportation, it didn't happen because regulators understood what cars were, or how they worked, or how they were different from horses. In fact, as people like Andreas Antonopoulos point out, cars flourished as a technology in the places where regulators left them alone.

Now, if you're not an anarchist like me, then at least consider this: It is far better to allow the technology to fully develop and begin to realize its potential value to society first; and it will be far more efficient for both the private and public sectors if regulators allow this development to occur organically. Sure: keep a close eye on it to make sure that certain companies aren't taking advantage of investors in this recent explosion of ICOs. But don't pretend that regulating a 21st-century technology with old, outdated rules that barely even worked in the last century are going to make things better.

This is about control...and a few of us in the cryptocurrency world have been able to see past the overnight riches of this recent boom (and now bust) in token prices to realize that something's not quite right with all this "mainstream adoption" coming up.

On a more personal level, this pisses me off because of one sentence from the Coindesk article:

"If you want to buy any financial product, you need to show passport, fill out a contract, write that you are not an American taxpayer. The same should apply here," Moiseev added.

So, I made my feelings known about FATCA just the other day and now this! The potential implications are huge and very, very bad for people with US tax liability, especially. Treating cryptocurrency like financial instruments sounds like it's headed toward the same sort of nonsense as the Combating Money Laundering, Terrorist Financing and Counterfeiting Act of 2017.

If this is mainstream adoption, we don't need it!